El Teniente

El Teniente (“The Lieutenant”) is an underground copper mine situated 2,300 m (7,500 ft) above the mean sea level in the Andes in Chile: 44km east of Rancuagua and 75 km south of the capital, Santiago (as demonstrated in Figure 1). El Teniente is owned by CODELCO (Corporación Nacional del Cobre de Chile or, in English, the National Copper Corporation of Chile), a Chilean State-owned copper mining company that is, on a global basis, currently the largest copper producer. El Teniente itself is reputed to be the largest underground copper mine in the world.

History of El Teniente

The El Teniente orebody has experienced a long history of small scale mining, starting as far back as the 16th century with the operation of a small mine known as the Socavon de los Jesuitas. These small-scale miners were forced out during the 1700s due to the purchase of the property by Don Mateo de Toro y Zambrano y Ureta, but it wasn’t until 1819 that his heirs would enlarge and restart the operation of the mine workings. This attempt, and many attempts thereafter, would not produce anything more than small scale, until the property was acquired by William Braden, an American Mining Engineer with enough capital to initiate the expansion that would lead to its current status as the largest underground copper mine in the world.Braden formed Rancagua Mines, which later became the Braden Copper Company in association with old Colleagues like Barton Sewell, its first president, after whom the first mining community was named. Between 1904 and 1971, the mine remained under non-Chilean control, until it was nationalized by the Chilean government.

Sewell, Original Mining Camp

Sewell is the original mining camp founded by William Braden in 1906, which lasted until the late 1980s, when the mine workers were moved down to Rancagua. It was a unique mining community in Chile, defying the inhospitable environment of hard winters, high altitudes, earthquakes and avalanches to eventually reach a peak population of 15,000. The camp’s second name is the City of Stairs, as it appears to have been poured down the mountain (see Figure 2). It holds the status of a UNESCO World Heritage Site.

Union Disputes

Throughout its history, there have been multiple labour disruptions at the El Teniente Mine, the most significant of those strikes occurring in 1983 and 2008.In 1983, the arrest of a union leader who called for an end to military rule in Chile sparked a 13,0000 worker strike at the operations of El Teniente and two other Codelco mines, ultimately forcing them to close. Between the three mines, 3,300 workers and 37 labour leaders were fired for their participation in the strike.

Again, in 2008, El Teniente and two other Codelco mines were forced to close due to a strike by contract workers. The contract workers closed access to the mines and threw stones at buses transporting company employees from the mine to the town of Rancagua, causing injury to at least one employee.

Resource Estimation

Table 1 summarizes the measured, indicated, demonstrated, and inferred resource estimation for the El Teniente deposit in 2008, established with a cutoff grade of 0.2% Copper, as of January 2008 (Codelco).

Geology

The El Teniente mine, a porphyry deposit located in the Andes Cordillera, is currently the largest intrusion-related Cu-Mo deposit in the world. The deposit was formed along the Nazca-South American subduction zone, when tectonic movements caused a shift in the subduction angle of the Nazca Plate (McKinnon, 2003). This shift created a large void along the Teniente fault zone, which resulted in the formation of large amounts of hydrothermal breccias and hypogenic minerals occurring within altered basalts, diabases, andesites, and gabbros (Maksaev, et al., 2003).

In the formation of porphyry deposits, most voids are filled with hydrothermal breccias or some kind of quartz mineralization, but some cavities remain undisturbed by such geological processes. As demonstrated in Figure 3, some of these cavities form spectacular clusters of selenite crystals. In the El Teniente Mine, one of these cavities has produced crystals up to 4 meters long and 1 meter across.

The deposit is estimated to contain 75 Mt of copper and 1.4 Mt of molybdenum. Though most of the ore is found within the main hydrothermal breccia pipe and in the surrounding alteration zones (as demonstrated in Figure 4), about 20% of the mineralization is found in the altered felsic outgrowths and dikes with biotitic and K-feldspathic alterations surrounding the deposit.

Geotechnical Information

The primary copper ore is very competent and massive with few open discontinuities. Within the copper ore, there is a network of high-frequency, small-scale healed veins coupled with widely-spaced, large- scale faults. It has been found that the weaker healed veins filled with particular mineralogical infill and thicknesses are more likely to define blocks during the fragmentation process. However, it has been determined, through research at the Esmeralda Sector, that both the fault and healed vein systems are mobilized and seismically active during its caving propagation.

Mining/ Production of El Teniente

As one of the largest underground copper mines in the world, El Teniente produces fine copper cathodes and molybdenum. The current daily ore extraction is close to 140,000 tons per day (in 2009), and the annual tonnages of fine copper and molybdenum are summarized in the Table 2.

Sectors in Operation

The production sectors existing at the El Teniente Mine are depicted in Figure 5. Each production sector at the El Teniente orebody behaves as a large-scale mine requiring planning, scheduling, coordination, and execution to develop its own continuous process of tunnel development and construction for specific areas to be commissioned for production. The sectors that compromise the production rate increase in 2003 are listed and summarized:

1. Teniente South Four a. 47Mt of reserves b. Average production is 29tpd c. Projected period term 20122. Esmeralda a. 310 Mt of reserves b. Will reach a production rate of 45 tpd c. Scheduled end is 20263. Reserves North a. 171Mt of reserves b. Will reach a production rate of 41 tpd c. Scehduled end is 20194. Diablo Regimiento a. 129 Mt of reserves b. Will reach production rate of 28 tpd c. Schedule end is 20235. Pipa Norte a. Reserve 15.8 Mt b. Will reach a production rate of 10 tpd c. Scheduled end is 2012

Mining Method

The El Teniente mine started operations in 1906, with several methods such as shrinkage and block caving of primary and secondary ore. Currently, it has about 2400 km of underground drifts and expands these workings by upwards of 64 km a year. Four main shafts feeding through the Braden Pipe to the working areas are used to send ore down to the primary underground gyratory crushers.

As mining has progressed and larger depths have been reached, the exploitation of only primary ore has resulted. The primary ore consists of soft, higher-stress, low-grade ore zones that fracture easily, often violently. Due to these conditions, the mine has changed over to mechanized ore transfer with panel-caving and block-caving methods.

Access to the underground workings is by adits in the hillside to meet the shafts. Transportation along these adits is primarily by train. Currently, the 8-train haulage level, at 1.983m, is being used to haul ore.

The caving method used consists of sublevels for production, undercutting and haulage purposes. Figure 5 shows an isometric view of the general set-up of a production zone and a layout and cross section of the undercutting drift and production levels where the ore is drilled and trenched. The ore funnels into the trench, once blasted, where it is transported by LHD to dumping points that will run the ore down 3m in diameter raises to a pick hammer station. There, oversize ore is broken through a grizzly and sent down a second 3m in diameter raise to the main haulage level. Figures 6 and 7 show cross sections of the path the ore takes from the production level down to the haulage level. 50% of the ore delivered to the mill is made available from the development processes alone, and the remaining 50% from the panel caving extraction processes.

A summary of the mining design parameters is enclosed in Table 3.

Equipment Used

Currently, the mine has three automated LHD’s ore transportation in the Reserves North Sector, operated by remote and by programming. Non-automated LHD’s (5yd & 8yd.) are the most commonly used method for transportation and electric trams are implemented as the secondary method. One boom drills for local drilling of oversize and jumbo are also implemented. Automated rock hammers are used to maintain material below 1 metre before entering the grizzlies (between the transport level and production levels) and where trucks dump to main haul level. 50 tonnes capacity rail cars or 80 tonnes capacity trucks transport the material.

Ground Support

For the development of drifts and crosscuts, fully grouted rebar, chain-link mesh and shotcrete is initially implemented and supplemented with fully grouted cables and steel sets at draw points. The area in which the draw point drifts intersection the production drifts is reinforced with confining cables and straps.

Dilution/Recovery

Dilution is the mixing of ore and waste. El Teniente is a panel caving mine. The nature of block caving is such that some dilution will occur as the stopes fail towards the draw points. At El teniente, there is more dilution in secondary stopes than primary sections (Susaeta, 2008).

Dilution is quantified using CUI, which is an indicator of draw performance. It takes the percentage of tonnage drawn as uniform or semi uniform material over the total material extracted (Susaeta, 2008). In a study undertaken by Codelco between 1992 and 2006, the properties summarized in Table 4 were found for the El Teniente mine.

Drilling and Blasting

The ore at El Teniente is pre-conditioned using hydraulic fracturing, a process that drill, and subsequently pump high pressured water into, large holes in the fractured orebody. This facilitates to pre-fracture the ore, as pre-conditioning reduces seismicity by alleviating stress. (Ananeda, 2008).

Ore Passes

El Teniente has 169 historical orepasses, through which over 320Mt of rock have travelled (Rojas, 2004). Due to a jointed rock mass, and increased stresses as mining advances, the orepasses are very well constructed. In addition, roughly 100,000 tonnes of material pass through every day (Rojas, 2004). After an initial 1.83m raise bore, manual slyping is done to widen the passes. The collars are reinforced with steel rings 1” thick, concrete, and grouted bolts throughout the length.

The main orepasses at El Teniente travel from the production level, to a rock breaking level, and finally to the haulage level, where the rock is taken away by train to the concentrator (Rojas, 2004).

Overbreak, the damaging of the lining walls of an orepass, is a major concern at El Teniente. Due to the high stresses found, ore passes may double or even triple in diameter (Rojas, 2004). In addition, the enormous volume passing through on a daily basis wears down the walls. The impact of oversize initiates the Overbreak, while the stress does most of the damage (Rojas, 2004).The damage done is primarily due to the position of the orepass in relation to the mining front, and when the orepass is started compared to the caving front.

Ore passes are also located in between the production and haulage level. These are 3m in diameter and 30m in length. The passes are located every 80m-100m (Copier G. D., 2008). Once pre-conditioning is completed, many undercuts are blasted out, and panel caving begins, as illustrated in Figure 9. No major production blasts are implemented.

Ventilation

Ventilation drifts are found 30m below the haulage levels. They are typically 4x4m or 5x5m. Adits drawing air into the mine are 7x7m, and vent raises are 1.5m in diameter (Copier G. D., 2008). Adequate air is supplied to account for all operating equipment. It is interesting to note that workers access the mine through a fleet of buses, all of which drive both underground and on the street to and from the mine.

Processing and Tailings

Ore from the El Teniente mine is now processed at the lower Colon Mill. There has been an increase in production rates as mining has reached the primary ore zone (lower grade) and the completed mill expansion to implement both SAG and conventional milling. These two milling processes split 130,000 tonnes per day equally. Post grinding, the crushed material is floated, thickened, and filtrated and the resulting concentrate is shipped down the valley to the Calteones smelter. The Calteones smelter has two Teniente converters with slag furnaces, three Pierce Smith converters, six anode furnaces feeding two anodes, and one fire refined casting wheel. Tailings are then sent down the valley to impoundments on flatter ground. Minera Valle Central retreats El Teniente’s tailings producing approximately 120,000 pounds per year of copper in the form of concentrate.

The smelter stack is the tallest of its kind in South America, reaching nearly 200m high. Approximately 10% of the gases exiting the stack is sulphur dioxide (SO2) yet still falls below Chile’s regulations for sulphur dioxide emissions.

El Teniente operates two acid plants: a plant for managing the sulphuric dioxide output from the smelting process and the other for decontaminating the soil of a nearby area which was infected by earlier mining processes. 5% of the sulphuric acid generated is used internally, the remaining is sent to northern areas of Chile to be used for leaching of Copper Deposits.

Sustainability and Environment

Codelco has a “Commitment with sustainable development, social and corporate responsibility and the transparency of the administration”. The company appears to take this statement very seriously, and El Teniente is a good example. They recognize different stakeholders, and actively engage the community in finding out what concerns are held, and seem to respond properly. In 2004, a project was developed in Los Cobres de Loncha ecological hacienda, in the El Teniente division. It essentially took an area near a tailings dam, and turned it into a park where students could be taught about the environment and outdoors. The area was made more sustainable by marketing it as a tourist area.

Environment

In 2001, El Teniente signed a voluntary environmental agreement with several local governing bodies. This is a fair indication as to the environmental responsibility taken on by this company. With the signing, an environmental committee was formed to define what actions were to be taken, and to monitor the compliance with the agreement.

In 2003, El Teniente was certified by SGS under ISO-14001. This system was developed to by the International Standards Organization to prove a company was both aware and trying to improve its environmental impact.

Current (2008) environmental projects are extensive at El Teniente. They include solid waste, liquid waste, emission capture, and closure plans.

Arsenic waste from the Cerro Minero deposit at El Teniente is being voluntarily withdrawn and transferred to an external end disposal. The closure of the deposit is being assessed by the Environmental Impact System.

There are seven industrial wastewater discharges monitored by SISS (Superintendency of Sanitary Services) at El Teniente. This output must comply with SD 90, a Supreme Directive dealing with industrial waste water discharging into oceans or onto the continent. In 2008, an external study was undertaken to characterize the liquid discharge to help solve the handling of the liquid waste material.

The El Teniente smelter captures SO2 and As. The products are then transported by rail and sold. A camp used to be near the smelter, but was moved in 1998 for worker safety due to emissions.

Green house gas emissions are becoming an increasing concern with many potential markets. As such, El Teniente has developed a program to determine the carbon footprint of a tonne of copper. They plan to include their own emissions, as well as contractors, and emissions caused by anything from power generation to the manufacture of grinding media.

Mine closure plans became mandatory in Chile under SD 72, which states that all mines must submit a closure plan for approval by the National Service of Geology and Mining by February 2009. El Teniente complied with this Decree in 2008.

Safety Compliance

In terms of Occupational Saftey and Health Policy, the divisions of Codelco- Chile are accredited by OSHAS 18001. To comply to the standards therein, the El Teniente Division has an implemented plan called the “Live Safety” which is composed of four components which are summarized in Table 5.

Economics

The El Teniente development plan outlines tactics to maintain production levels of 430 000 tons annually. 2008 saw just over 380 000 tons being mined with costs of 54.7 cents/lb of material mined, which is down from just over 404 000 tons at a cost of 47 cents/lb in 2007. Table 6 summarizes costs and revenues for years 2006 through 2008.

El Teniente’s operating and net margin for the most recent year, 2008, is 49.3% and 16.3% respectively. The tax rate for the mine is 60%.

By the close of 2010, El Teniente’s Pilar Norte project should be completed. At a cost of $US 133 million, the investment will contribute 55 thousand tons of fine copper per year with an average grade of 1.32%.

El Teniente is continuously negotiating with its unions to satisfy the needs of its employees. In 2007, it negotiated a base pay giving workers an increase of 3.50% over a period of 39 months.

Upcoming Large-Scale Projects

The El Teniente Division is currently focusing on broadening production through the New Level Mining Project and the Pilar Norte Project:• The pre-feasibility study on the New Level Mining Project was completed in 2008. The project, estimated to require a $1.48 billion US investment, is scheduled to begin operations in 2017 and projected to increase mine life another 50 years. • The Pilar Norte Project expects to contribute 55 thousand tons of fine copper per year in order to replace the zones within El Teniente that are depleting. This project, projected to complete in 2010, will require an additional US$ 133 million investment